The process of gene silencing is conserved from yeast to humans, playing a crucial function in establishment, maintenance and propagation of distinct patterns of gene expression. Gene silencing plays a pivotal role in development, stem cell self-renewal and differentiation, and its dysregulation can cause developmental diseases, neurodegenerative disorders, inflammation as well as cancer. In all eukaryotes, spatial and temporal regulation of gene activity is directed by packaging of DNA into chromatin. The fundamental repeating unit of chromatin is the nucleosome that comprises 146 base pairs of DNA wrapped around an octamer of histone proteins. The nucleosome is the platform upon which proteins and protein complexes assemble to regulate chromosomal transactions such as gene transcription. Of particular interest to us are proteins and protein complexes that bind to nucleosomes to create epigenetically silent chromatin domains, their regulation by posttranslational modifications of histones and their effect on higher-order chromatin structure. Yeast has been instrumental in studying the establishment and maintenance of silent chromatin. Two widely studied and essential components of gene silencing in yeast are the Silent Information Regulator (SIR) complex in S. cerevisiae and Heterochromatin Protein 1 (HP1) in S. pombe. These proteins can bind nucleosomes - a process regulated in part by posttranslational modifications of histones - and spread across chromatin in a sequence independent fashion, establishing a chromatin structure that is refractory to transcription. The detailed mechanisms involved in these processes are largely unknown. To address this critical gap in the field of gene silencing, we will use structural and functional approaches. In AIM 1 we will determine three- dimensional structures of Sir3 (the core component of the SIR complex) in complex with the nucleosome and with the chromatin array. In AIM 2 we will determine the structure of fission yeast HP1 (Swi6) in complex with the chromatin substrate bearing histone H3 lysine 9 methylation. We will complement these structures with functional in vitro and in vivo experiments. The structural and functional studies of Sir3 and Swi6 in complex with nucleosomes will uncover the general principles underlying the assembly and spreading of these proteins on chromatin. Additionally we will investigate whether and how binding and spreading results in higher-order folding or compaction of chromatin. Our proposed comprehensive studies will provide crucial insights into the fundamental biological process of chromatin compaction and ultimately gene repression, and will provide invaluable insights into how deregulation of these complexes and chromatin structure contributes to disease.